Concierge Medical Practices Expand

Today’s Managing Health Care Costs Indicator is $1800

Two high volume, well-respected medical leaders at one of the excellent community hospitals in Boston, Newton Wellesley Hospital, have announced that they are converting to a ‘concierge’ practice  affiliated with MDVIP, and they will start charging patients $1500- $1800 annually for continued access to their care.  Their practice says it will recruit new physicians to take care of the estimated 2/3 of their patients who will not be able to continue under their care.

Concierge practices make excellent economic sense for top flight primary care physicians.  In general, PCPs have 55-60% overhead, so a PCP might have to gross $450,000 in revenue to have $200,000 in take-home income.  Most PCPs do this by having practice panels of 1800 or so patients.  That means a revenue yield of as little as $250 per enrolled patient.  That’s because many patients are not seen the entire year, and cognitive services are relatively poorly paid.

MDVIP practices charge $1800 per person for a panel of merely 600 patients – which leads to a revenue yield of over $1 million.  The practices also bill insurers for actual services delivered – so the total gross revenue is substantially higher.

Concierge practices, however, increase the total cost of health care but increasing out of pocket payment from those who enroll in the practices.   They are elitist by definition – a limited group can afford to pay for health insurance, copayments and coinsurance, as well as an additional concierge practice fee.

I think there are some very good things about concierge practices.  We need innovation in primary care, which could come from these high end practices much as airbags were initially developed for Lexus and Mercedes.  Concierge practices are an ideal testing ground for such innovations as truly patient-centered (and accessible) medical records and real-time physician access via web portals.

But there is an obvious dark side to concierge practices.  Many are already suggesting that the influx of new patients into the health care system will tax the primary care system beyond its capabilities.   Senior, highly-competent physicians shedding two thirds of their panels to provide concierge care will make the actual shortage substantially worse.

Primary care is badly broken, and we need new models that allow physicians to practice at the “top of their license.”  My belief is that these models will use a lot of non-physicians, including physician assistants and nurse practitioners.  These clinicians are able to prescribe medicines, have a long history of building and sustaining excellent patient relationships, and are more likely to follow evidence-based medicine guidelines and algorithms than physicians.  We need ways to allow physicians to provide excellent care for more patients, not fewer. 

There is a role for boutique medicine – but it solves the problems for individual primary care physicians and their well-to-do patients without providing additional access to more patients, which is a pressing social need.